What are the main features of (YFI)?


YFI is known as the native cryptocurrency of the protocol. It is a governance token that allows users to vote on which direction they want the protocol to go first.

YFI has become one of the largest Ethereum-based tokens due to the protocol’s focus on automated yield farming strategies since its launch in July. In a way, you can think of as a robot that is always trying to find the best returns in Ethereum DeFi.


Decentralized finance – otherwise known as DeFi – has seen parabolic growth as yields offered by protocols have exploded higher. A significant part of this growth can be attributed to the introduction of governance tokens, which allow holders to determine the direction in which they want protocols to evolve. Governance tokens are an important step in the decentralization of DeFi protocols.

Following the wave of governance tokens, launched YFI in July 2020. It quickly captured the crypto space as it continued to grow from $3 to $30,000 in a single month.

What is

Before we get into YFI, we should give some context about – also known as yEarn.

Launched in early 2020 by Andre Cronje, is an Ethereum-based protocol focused on providing users with access to the highest yields on depositing ether, stablecoins, and altcoins. A South African fintech developer, Andre Cronje, was motivated to build after he noticed inconsistencies in the yields offered by various DeFi apps.

After being exploited shortly after launch, Cronje overhauled the protocol to provide users with a new set of products.

Key features

The main feature of the protocol is called Vaults. This feature allows users to deposit crypto as well as earn interest. Deposits are managed according to a strategy that tries to maximize return and minimize risk. At launch, Vaults was primarily focused on stablecoins, but since then, they have expanded to support ether, encrypted Bitcoin products, Chainlink, and others.

Key features yfi

Vaults are important because they minimize the high transaction costs on Ethereum. By pooling capital, only one account (controller of each Vault) has to pay transaction fees (gas) in order to profit from the farm. also provides other services besides. Earn is a stripped down version of Vaults that only supports encrypted stablecoins and bitcoins. Zap allows users to swap traditional stablecoins for liquidity provider tokens that represent stablecoins. is currently working on other products such as yInsure, a decentralized insurance protocol for DeFi users, and StableCredit, which will facilitate decentralized lending and lending.

Meet YFI

Until July, is quite niche. After mining in early 2020 and the crypto market crash in March, many users were hesitant to use the new protocol.

This changed when Cronje released a blog post to Medium announcing YFI, an ERC-20 token launched for users to govern the protocol.

YFI can be “raised” through a number of methods, including providing liquidity to Balancer, a decentralized exchange, and depositing capital into products.

While the media post mentions that YFI has “no intrinsic value”, the market continues to consume these coins. After starting to trade at $3 in a Balancer pool, the cryptocurrency skyrocketed as investors saw the value in managing, starting to collect tens of millions of deposits.

Immediately after launch, the community decided on a maximum supply of 30,000 coins, choosing to keep YFI scarce rather than allowing it to grow even higher. Users unhappy with this decision forked the project, creating a fork now known as or YFII.


While YFI is important to in that it generates deposits and attention, the coin has another purpose: decentralizing development and control of the protocol between users.

The farming mechanism allows any user – whether they have $100 or $1,000,000 – to earn YFI at the same time and for the same cost. This means that any user can obtain YFI to influence

Since the launch of YFI, a comprehensive governance portal has launched where token holders can vote on various decisions proposed by community members.

yfi chart

Decisions made so far include hiring a team of marketers and developers as well as adding certain strategies to Vaults.

Holders have also made the important decision to give YFI holders access to a portion of the protocol’s profits. Fees implemented in products are accumulated into the Treasury, which is then distributed between YFI holders and the team. This makes YFI a dividend-paying asset, unlike Bitcoin or Ethereum.

Why is important?

While many focus on the price action YFI experienced, this is most important because it marks a shift in how protocols can encourage adoption. It is argued that YFI’s launch is “the fairest launch since Bitcoin”, as anyone can participate in the coin’s creation while paying the same price.

Instead of using an Initial Coin Offering (ICO) model, where users pay a certain price for each new coin, YFI users must participate in the protocol. This mechanism allows a community to quickly build around the project, as every user has the ability to influence through governance tokens.

Even after the initial price movement, still has one of the most active communities in the decentralized finance space and crypto in general.


It is not without challenges for YFI. Because Andre Cronje has been the mastermind behind and YFI for a long time, investors are watching his moves with keen intent. This means that if he takes the time off, many might see it as a blow to YFI. As a result, some argue that the project is still centered around this main player (at least to some extent).

This was highlighted earlier this year when it was reported that Cronje said he wanted to leave the DeFi space. YFI prices continue to decline amid concerns about project closures.

This “Cronje Premium” trend (as some traders have named it) is slowly losing relevance as starts introducing new team members. It may cease to be a concern if decentralized governance continues to grow without the influence of Cronje.

Closing thoughts

The launch of YFI marked an industry-wide shift in how crypto projects distribute coins. By incentivizing early users, projects can gain rapid adoption and community growth. This ties into the concept of “skins in the game”, suggesting that those with money or affection in an investment will do what they can to allow it to succeed. is an interesting protocol that is building unique decentralized financial products. The future looks bright as they hire a team of developers and marketers, but only time will tell if the project will manage to grow longer in the Ethereum DeFi space.

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